Brent declines as Ukraine peace negotiations pick up speed

The front-month ICE Brent contract has fallen $1.37/bbl lower on the day, to trade at $62.56/bbl at 09.00 GMT.

IMAGE: Silhouette of oil pump jacks and field workers at dusk. Getty Images

Upward pressure:

The latest weekly figures from the US Energy Information Administration (EIA) have offered some support to Brent.

The EIA data showed commercial crude inventories falling by 3.4 million bbls to 424 million for the week ending 14 November. A US crude stock draw typically indicates higher demand.

“[US] Refiners also increased run rates, leading to stronger crude oil inputs,” two analysts from ING Bank said.

Downward pressure:

Brent crude has come under renewed downward pressure following reports that Ukrainian President Volodymyr Zelensky has agreed to coordinate with Washington on a peace plan.

The US Army Secretary Dan Driscoll met President Zelensky yesterday, to discuss Washington’s new 28-point peace framework.

Yesterday was also the day when US sanctions on Russian oil companies Rosneft and Lukoil officially took effect.

Oil market analysts say these developments could eventually pave the way for easing sanctions on Russian crude, which could add more barrels to an already oversupplied market.

“Crude futures were under a stronger downward momentum early Friday after settling marginally lower as the US-led diplomatic push on Ukraine gathered pace,” Vanda Insights’ founder Vandana Hari said.

By Aparupa Mazumder

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